Why money is quietly fleeing US markets 💸

A massive financial pivot is unfolding as Japan shifts its monetary policy, triggering a potential chain reaction across global markets. For years, the carry trade made borrowing yen to invest in dollar-denominated assets incredibly lucrative. However, as Japanese interest rates climb, the cost of currency hedging has turned that advantage into a liability. Investors, from massive pension funds to global hedge funds, are now unwinding these positions to repatriate capital. This shift represents a significant, often overlooked tremor that could reshape liquidity and asset prices across the United States. Understanding the mechanics behind this capital flight is essential for grasping the current volatility.
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